Jumia, the biggest e-commerce platform in Africa, last year became the first tech company to be listed on the (NYSE) New York Stock Exchange. This was seen as a significant milestone in Africa’s tech circles.
Jumia was first founded in the year 2012 in Ikeja, Nigeria. To date, it has traversed into14 African countries, making it the first in Africa to achieve this.
On the first day of trading, many predicted that the company would prove a draw. Jumia soon raised 196 million dollars through its (IPO) Initial public offering. The stock rose impeccably, closing at 75% on its opening day. The estimated value of Jumia at this point was 3 billion dollars.
Today, the tables have turned for Jumia at the NYSE. The stock unfortunately crashed by August below the IPO price. Many attributed the initial soar to the fact that Jumia was the first to list in New York. The fact that they also had very reputable anchor investors backing it also explains the exemplary performance in the initial run.
Jumia was expected to perform positively, given that other tech ventures in that year had made it big. The likes of Lyft, Uber, Slack, and Airbnb had “killed it” at the NYSE.
Soon after the IPO earnings, fraud allegations were rife. A Los Angeles based broker claimed that there were discrepancies in the S1 filing. These allegations were termed baseless and in bad taste by the company’s management.
Four months after the initial fraud claim, internal investigations unearthed fraudulent orders inhouse. This had inflated Jumia’s order volume by 17.5 million dollars. Lawsuits continue to be filed against the company over various such allegations.
Jumia’s management remains hopeful and has promised its investors that it will be profitable by 2020. It has also launched a fintech to tweak its e-commerce business model further. Jumia pay was launched in 12 out of the 14 countries this year.
Currently, the company is still reporting million-dollar losses quarterly.